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This research demonstrates a palm kernel shell gasification system for producing fuel gas, also known as producer gas. Using air as an oxidant, the gasification process converts palm kernel shells into fuel gas which contains combustible gases, such as hydrogen, carbon monoxide, and methane with nitrogen dominating the composition of the gas. This fuel gas can supply heat via direct combustion or generate electricity for fossil fuel substitution of an internal combustion engine. As a biomass-derived gas, the fuel gas is characterized as carbon-neutral inherently. During the conversion process, the system needs electricity to power the screw feeder, air blowers, and cooling-water pumps, and to rotate the gasifier's bottom plate to take the char out. Based on the experiments, mass balance, and energy balance calculations, this study examines the global warming, acidification, and eutrophication potential using the openLCA v1.10.3 software and Environmental Footprint (MID-Point indicator) database for impacts assessment when the system is operated in Indonesia and Malaysia with various electricity sources. It is found that the feedstock contributed most of the global warming potential and eutrophication potential, while the electricity dominated the acidification potential. This study recommends operation at a lower equivalent ratio to reduce environmental impacts. • Air gasification of palm kernel shells to produce fuel gas was conducted at a 25 kg/h gasifier capacity. • This study assessed the Global Warming, Eutrophication, and Acidification Potentials of the gasification process. • The effects of equivalent ratios on the environmental impacts were evaluated using a life cycle approach. • Palm kernel shells acquisition showed significant environmental impacts. • The scenarios to improve the process included variations of feedstock sources and electricity generation methods. [ABSTRACT FROM AUTHOR]